TSX Ends Lower On Russia, ECB Comments -- Canadian Commentary

By RTT News, 
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(RTTNews.com) - Canadian stocks ended lower on Thursday, after European Central Bank President Mario Draghi warned the crisis in Ukraine could hurt eurozone economy. Nevertheless, Draghi gave no hint of any further stimulus forthcoming for the eurozone despite the threat of deflation and Russian retaliation with imposition of import bans on the U.S. and European Union.

Investors also reacted to a mixed batch of corporate earnings reports, even as concerns over a possible Fed rate hike sooner than anticipated earlier also appear to be weighing on the market.

Meanwhile, investors continue to keep a close watch on the developments in Ukraine. Reacting to sanctions from the U.S. and the European Union, Russia imposed a ban on import of agricultural produce from the U.S. and imports of fruits and vegetables from Europe.

The S&P/TSX Composite Index closed Thursday at 15,118.43, down 83.66 points or 0.55 percent. The index scaled a intraday high of 15,254.75 and a low of 15,056.11.

On Wednesday, the index closed higher on some upbeat Canadian and U.S. trade data, as well as encouraging earnings reports.

Crude oil ended higher on deepening tensions between Russia and the West over Ukraine, with some upbeat data showing first-time claims for U.S. unemployment benefits dropping more than expected last week.

The Energy Index dropped 0.70 percent, although U.S. crude oil futures for September delivery gained $0.42 or 0.4 percent to close at $97.34 a barrel Thursday on the Nymex.

Canadian Natural Resources Limited (CNQ.TO) declined 2.23 percent despite reporting a second-quarter profit that surged to C$1.07 billion, or C$0.97 a share from C$476 million or C$0.44 a share in the prior-year quarter.

Whitecap Resources Inc. (WCP.TO) gained 2.41 percent after reporting second quarter net income of $0.85 per basic share, compared to $0.14 per basic share in the year ago quarter.

Among other energy stocks, Enbridge Inc. (ENB.TO) slipped 0.51 percent, Suncor Energy Inc. (SU.TO) shed 0.72 percent, Talisman Energy (TLM.TO) dipped 0.18 percent, Encana Corp. (ECA.TO) added 1.71 percent, and Cenovus Energy Inc. (CVE.TO) dropped 1.71 percent.

The Healthcare Index gained 1.88 percent with Valeant Pharmaceuticals Inc. (VRX) shedding 2.95 percent and Catamaran Corp. (CCT.TO) up 0.76 percent.

Extendicare Inc. (EXE.TO) jumped 7.33 percent after reporting an 8.6 percent increase in adjusted earnings in the second quarter.

The Financial Index dropped 0.79 percent as all major banks ended in the red. Toronto-Dominion Bank dropped 0.85 percent, National Bank of Canada (NA.TO) dipped 0.31 percent, and Bank of Nova Scotia (BNS.TO) surrendered 0.99 percent.

Canadian Imperial Bank Of Commerce (CM.TO) dipped 0.15 percent, Royal Bank of Canada (RY.TO) dropped 0.43 percent, and Bank of Montreal (BMO.TO) dived 0.87 percent.

Meanwhile, Manulife Financial Corp. (MFC.TO) slipped 1.23 percent after its second-quarter net income attributed to shareholders surged to C$943 million or C$0.49 per share from last year's C$259 million or C$0.12 per share.

Gold futures ended sharply higher on Wednesday, with investors keeping off risky equity assets as most global markets ended in the red on developments over Ukraine.

Global Gold Index gained 0.30 percent, with gold futures for December delivery adding $4.30 or 0.3 percent to close at $1,312.50 an ounce on the Nymex Thursday.

Among gold stocks, Yamana Gold Inc. (YRI.TO) added 0.42 percent, Barrick Gold Corp. (ABX.TO) gained 0.65 percent, Goldcorp Inc. (G.TO) added 0.46 percent, and Eldorado Gold Corp. (ELD.TO) advanced 0.67 percent.

Among gold stocks, Franco-Nevada Corporation (FNV.TO) gathered 3.22 percent on strong quarterly results.

The Capped Materials Index shed 0.36 percent on gold mining stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) down 1.70 percent.

The Diversified Metals & Mining Index lost 1.34 percent, with First Quantum Minerals Ltd. (FM.TO) down 0.68 percent, Lundin Mining Corp. (LUN.TO) down 3.60 percent and Teck Resources Limited (TCK.B.TO) dipped 1.66 percent.

The Capped Industrials Index shed 0.34 percent, with Bombardier Inc. (BBD.B.TO) up 0.53 percent.

Air Canada (AC.A.TO) plunged 8.21 percent despite reporting a second-quarter net income of C$223 million and C$0.75 per share, as against a net loss of C$23 million and C$0.09 per share in the second quarter of 2013.

Canadian Tire Corp. (CTC.A.TO) gained 2.61 percent after registering a profit of $178.9 million for the second quarter, compared to $154.9 million a year earlier.

The Capped Telecommunications Index slipped 0.33 percent, with Rogers Communications Inc. (RCI.B.TO) dropping 1.06 percent and Manitoba Telecom Services Inc. (MBT.TO) surrendering 0.33 percent.

Telecom giant Telus Corp. (T.TO) added 0.71 percent after reporting its second-quarter net income increased to C$381 million or C$0.62 per share from C$286 million or C$0.44 per share last year.

BCE Inc. (BCE.TO) shed 0.63 percent after reporting second quarter net earnings of C$606 million or C$0.78 a share, compared to C$571 million or C$0.74 a share last year. On an adjusted basis, quarterly earnings per share amounted to C$0.82.

The Information Technology Index dropped 1.06 percent, with BlackBerry Limited (BB.TO) surrendering 1.27 percent and Avigilon Corp. (AVO.TO) down 0.84 percent.

The Capped Utilities Index inched up 0.06 percent with Fortis Inc. (FTS.IR.TO) declining 1.78 percent.

On the economic front, Statistics Canada said new building permits rose by a seasonally adjusted 13.5 percent in June, beating expectations.

In economic news from the U.S., a report from the Labor Department showed initial jobless claims to have unexpectedly declined to 289,000 in the week ended August 2nd, a decrease of 14,000 from the previous week's revised level of 303,000.

The European Central Bank today held its key lending rate unchanged at 0.15 percent, as expected. The bank maintained the deposit rate at -0.10 percent.

Meanwhile, the Bank of England kept its key rate at a record low on Thursday, sticking to its forward guidance even as the strong pace of economic recovery augmented speculation for a rate hike late this year. The nine-member Monetary Policy Committee decided to keep its key bank rate unchanged at 0.50 percent and the asset purchase program at GBP 375 billion.

Germany's industrial production grew marginally at a slower-than-expected pace in June, as geopolitical instability weighed on economic activity, data showed Thursday.

German industrial output increased 0.3 percent month-on-month in June, reversing the revised 1.7 percent fall in May, Destatis reported. This was slower than the expected 1.2 percent increase. Nonetheless, it was the first rise in four months.

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Referenced Stocks: ABX , BCE , BMO , BNS , CM

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